This is how this letter reads to me: Woohoo, we got acquired. Thanks a lot for bringing our valuation up buy trusting us. We started $service to solve a problem that matters to you. Because of that we're joining $totally_unrelated_product. Thanks for all the fish.
Most likely they would have gone out of business either way because nobody is going to do an acqui-hire deal if their company had plenty of funding or was actually profitable. If I was working somewhere, I'd rather the founders managed to finagle an acqui-hire rather fire everybody. You're right, though, there's nothing great about it for the users.
If I was an entrepreneur I would be rather annoyed by that kind of message because user's trust is a shared resource. It's selfish. Soon enough start-up will start to be negatively connoted. A sort of Made-in-China in the virtual world.